Banks permitted to do foreign currency sell and purchase business

Karachi:   The State Bank of Pakistan (SBP) has allowed banks to sell and purchase foreign currencies across the country, thus eliminating the role of foreign currency exchangers. Earlier, banks could not trade foreign currency exchange with the public except those banks which had their own foreign exchange companies.

Although SBP did not say anything about the future of the exchange companies, a clear resentment, therefore, has been seen among the exchange companies, sources revealed.

Under the revised purchase rules, any incoming person can bring foreign currency notes or other instruments of any value. However, as earlier, he/she has to submit a declaration to the Customs if the value of the amount equals or exceeds $10,000.

“Such currencies or instruments may be freely purchased by the Authorised Dealers (banks) against payment in PKR. Authorized dealers may also purchase foreign currencies withdrawn by the account holders from the foreign currency accounts and from walk-in customers against payment in PKR subject to fulfillment of applicable AML/CFT regulations,” said SBP.

Currency dealers opine that such measures indicate that exchange companies are no longer needed in Pakistan. However, it surely will have ramifications for the public, as banks may not provide the ease of sell and purchase of foreign currencies that these companies provide, said Secretary-General Exchange Companies Association of Pakistan Zafar Paracha.

He added that banks could neither entertain millions of customers nor could they trade with such a minimum margin that they do. He said that banks charge 12-14 rupees per remittance while exchange companies do it for free. Secondly, such a measure is to relieve 25000 employees directly and 60 thousand employees indirectly from their jobs.